Byzantium to the 21st Century

Come April 2010, New York State appears ready to lurch from Byzantium into the 21st century.

That’s when the state’s governor presents his new budget to the legislature, which  manages to pass it on time once a century.

In any case, for the 2010 budget Governor Paterson has taken two bills, Assembly (A8632A) and Senate (S5787) together to construct a proposal that would allow wine sales alongside groceries in New York—and this time, it might pass.

When the governor tried this move last year, the state’s wine and spirits retailers organization was dead against the idea and any form of it, proving once again how entrenched regulated complacency can become. The organization didn’t even want to consider using the proposal to press its members’ needs and get a few things changed in the regulations, like allowing wine and spirits shops to sell groceries and beer, which they cannot do, and which wasn’t in the governor’s plan.

Another opening that the retailers let go by was the possibility of using their potential acquiescence as a bargaining chip to press the State Liquor Authority (SLA) to relax some of its Byzantine interpretations of the state’s alcohol control laws with the kind of rules that slap a fine on retailers who try to sell beautiful wine gift bags around the holidays (they can package wine in bags, but they can’t sell the bags).

One SLA interpretation forbids mom and pop retail stores from taking advantage of volume discounts by forming cooperative buying groups. That one rule may have been the most responsible for the steadily declining number of neighborhood shops and the rise of giant stores across the state. Or the SLA could have been forced to relax pricing and discounting filing requirements that are the basis of much under-the-table wheeling and dealing in the industry that no one likes to admit.

Other matters that the retailers could have used to press the SLA concern licensing hurdles like the rule that says before applying for a license to sell alcohol at retail the applicant must sign a lease or own the space planned for the store. So, while waiting for the retail license process to complete, which can take up to one year in New York, depending upon who contests the application and who needs to get paid off, the applicant pays rent on a vacant storefront.

There are so many similar and oppressive SLA rules that continuing would make this blog entry appear surreal.

Some of the above nonsense is addressed in the new proposal, the most sweeping of course is that wine and spirit shops would be allowed to sell food items and grocery stores would be allowed to add wine to their shelves (I don’t think, however, that beer will be allowed in wine and liquor shops—yet).

The second grand change on the list is in the way licenses will be issued. No more will you have to lease a space and pay rent on it while you await the Byzantines to stamp all the right documents. A temporary license will be issued pending approval for a real one. Plus, once issued, licenses will become commodities with value, modeled after the taxi medallion that in NY City can be worth hundreds of thousands of dollars each.

There are other proposed changes, many of which I have yet to dig into. It’s enough for now to know that the governor is proposing and this time the retailers seem to be getting on board. Perhaps someone did a seminar to persuade them not to be like Americans seem to be with regard to health care reform and say no against their own best interests just because things are the way they are and we are used to it.

With a few exceptions, the NY wine and grape industries have been on board. Those of us in the wine business in the 1980s felt that “change was gonna come.” We didn’t think it was going to take this long, but now that it appears to be on the horizon, it is cause for celebration.

Now, if the state could only do something about its dysfunctional political system as well as its oppressive and punitive property tax system, we might bring New York all the way through the 21st century—intact.

The new rules
Alcohol Control

If you are reading this entry anywhere other than on the vinofictions blog, be aware that it has been lifted without my permission (and without recompense), and that’s a copyright infringement, no matter that the copyright information appears with it.

Copyright Thomas Pellechia
January 2010. All rights reserved.

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